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Global macro overview for 30/05/2018

Today's moods in the markets after yesterday's sale of Italian bonds are a bit calmer. Yesterday's profitability of Italian 10-year olds to 3.35%, today drops below 3.0%, and the spread with German bunds narrows to 267 basis points. The turbulence on the Italian political scene is taking on a routine character, so the markets are going into a waiting mode: in the coming days, inflation and PMI for the Eurozone will be published.

The German unemployment rate has dropped from 5.3% to 5.3% and the unemployment change index (this indicator shows the number of unemployed people in Germany) dropped stronger than expected to -11k versus -10k people. The markets still await the German CPI data for the whole country that will be published at 02:00 pm GMT, but a look at the CPI growth in particular zones suggests that price indices have risen strongly. The monthly dynamics for all zones, for which data was published, reached 0.4-0.7%. So far the data are very encouraging and the Euro bulls will likely take the advantage of this situation.The turbulence on the Italian political scene is taking on a routine character, so the markets are going into a waiting mode: in the coming days, inflation and PMI for the Eurozone will be published.

Let's now take a look at the EUR/USD technical picutre at the H1 time frame. After the job market data beat the expectations, the EUR/USD rate jumped towards the intraday resistance at the level of 1.1606 and broke it, so the next intraday target is seen at the level of 1.1644 - 1.1651 zone. The immediate support is seen at the level of 1.1580. Strong momentum and stochastic oscillator rising from the oversold levels support the temporary bullish outlook.